Analyst Wilson from Morgan Stanley suggests buying stocks on dips.
Morgan Stanley strategist Michael Wilson said that due to strong earnings prospects next year, investors should buy when the US stock market is falling. Wilson wrote in a report on Monday that despite the pressure the S&P 500 Index faces from a weak labor market and tariff-related inflation that could delay a rate cut by the Federal Reserve, investors should see any pullback as a buying opportunity. "From our breadth of earnings revision analysis, a rolling recovery has begun," Wilson wrote. "Although the Fed is currently on hold, later this year inflation momentum will weaken, combined with a soft labor market, these factors together should lead to a strong easing cycle." The record surge in the US stock market was abruptly halted last week, with the S&P 500 Index going from setting six consecutive all-time highs to four consecutive trading days of decline. Last Friday, data showed a slowdown in job growth, an increase in the unemployment rate, and President Donald Trump's announcement of tariffs on a series of US trading partners, leading to a stock market decline. Morgan Stanley's Wilson also said that the application of artificial intelligence, a weaker US dollar, and tax cuts will be positive factors for the stock market. The strategist has been one of the most pessimistic voices on the US stock market until mid-2024.
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